Denver marijuana company CS Compliance Systems runs into trouble with credit cards

Merely working with cannabis dispensaries was enough for CS Compliance Systems to have its credit card processing privileges revoked.

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Denver's latest cash crop. (Kevin J. Beaty/Denverite)  marijuana; pot; weed; denver; colorado; denverite; kevinjbeaty;

Denver's latest cash crop. (Kevin J. Beaty/Denverite)

CS Compliance Systems ran into trouble this month over its ability to accept credits, even though the Denver-based consulting and technology firm doesn’t sell marijuana.

Merely working with cannabis dispensaries was enough for CS Compliance Systems to have its credit card processing privileges revoked by the merchant service provider it’s working with, operations manager Ryan Lewis said.

“It’s huge bump in the road” for growing the small company, Lewis said.

This situation is also a reminder of the strange financial spot the marijuana industry is currently in with banks and other companies that are hesitant to work with dispensaries and other marijuana-related businesses without a green light from the federal government.

“The frustrating thing is we don’t have anything to do with selling cannabis. If anything, we’re helping people follow the federal rules, but we’re being punished the same as they are,” Lewis said.

CS Compliance Systems planned to start accepting credit cards from dispensaries in Colorado and Oregon this month in exchange for use of its CannaScore software application. The application helps cannabis dispensaries follow government regulations by providing them with a score for how they’re doing.

The company was already offering the service to cannabis consultants in exchange for cash or checks, Lewis said. Because CS Compliance Systems, can’t take credit from dispensaries, the company is temporarily offering a limited version of CannaScore for free.

Lewis declined to provide the name of the company that CS Compliance Systems was working with but said it is similar to, but not necessarily, Paypal. CannaScore manager Tom Smith said he’s “cautiously optimistic” that CS Compliance Systems can work with the merchant service provider to resolve the situation.

Business & data reporter Adrian D. Garcia can be reached via email at agarcia@denverite.com or twitter.com/adriandgarcia.

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